What Texas Form 00-985 Is For
Texas Form 00-985, Assignment of Right to Refund, is an official document issued by the Texas Comptroller of Public Accounts that acts as a ""permission slip"" allowing purchasers to seek sales tax refunds directly from the state when they've paid sales tax in error. Think of it as a transfer of authority: the seller (who originally collected and remitted the tax to Texas) signs this form to assign their right to claim that refund over to you, the purchaser who actually paid the tax.
This form becomes necessary in situations where you don't hold a Texas sales and use tax permit but paid sales tax on a purchase that should have been tax-exempt. Common scenarios include tax-exempt nonprofit organizations that were charged sales tax despite their exempt status, purchasers who qualified for exemptions during special sales tax holidays (like emergency preparedness or ENERGY STAR holidays), or businesses that paid tax on items that should have been exempt for other statutory reasons.
The form creates a legal bridge between three parties: the assignor (the seller who collected the tax), the assignee (you, the purchaser requesting the refund), and the Texas Comptroller's office (which will process and issue the refund). Without this assignment, the Comptroller's office cannot legally refund money to someone who didn't originally remit it to the state.
When You’d Use Texas Form 00-985
Late or Amended Scenarios
You'll need Form 00-985 when you discover—whether immediately or months later—that you paid sales tax on a purchase that should have been exempt. The most common trigger is when a tax-exempt organization makes a purchase and the seller either doesn't accept their exemption certificate or charges sales tax anyway.
Rather than the organization being stuck with that incorrect charge, they first ask the seller for a refund. If the seller refuses or is unable to provide a direct refund, the seller should complete Form 00-985, allowing the purchaser to pursue the refund directly from the Comptroller.
Late discovery situations happen frequently. Perhaps your nonprofit organization received its tax-exempt status but made purchases before knowing to use exemption certificates. Or maybe you participated in a sales tax holiday but weren’t informed by the retailer.
Statute of Limitations
You must act within the statute of limitations—generally four years from the date the tax was originally due and payable.
Special Exceptions
An important exception exists for crude oil and natural gas severance taxpayers. As of September 1, 2021, eligible taxpayers can request refunds directly without Form 00-985 for newer invoices.
Business Transfers and Assignments
The form is also used when businesses assign refund rights to third parties such as creditors, trustees, or successor entities.
Key Rules or Details for 2021
Four-Year Deadline
The four-year statute of limitations is the most critical rule. Miss it, and you permanently lose the refund.
Assignor vs. Assignee
- Assignor = seller who remitted the tax
- Assignee = purchaser requesting refund
Each vendor requires a separate form.
Signature Requirements
The form must be signed by an authorized individual (owner, officer, or legal representative). Unauthorized signatures will cause rejection.
Required Companion Form
You must also submit:
- Form 00-957 (Texas Claim for Refund)
- Supporting documentation (invoices, receipts, proof of payment, etc.)
Exempt Organization Limitations
Refunds cannot be claimed for purchases made before exemption approval.
Step-by-Step (High Level)
#### Step 1: Request the Assignment from Your Seller
Contact the vendor and request either a refund or completion of Form 00-985.
#### Step 2: Complete the Assignment Form Properly
Fill in:
- Assignee details (you)
- Assignor details (seller)
- Signature and authorization
#### Step 3: Prepare Supporting Documentation
Gather:
- Invoices
- Receipts
- Proof of payment
- Exemption certificates
Use Form 01-911 if you have more than 10 transactions.
#### Step 4: Complete Form 00-957
Include:
- Reason for refund
- Time period
- Refund amount
- Tax jurisdictions
#### Step 5: Submit Your Refund Claim Package
Options:
- Online
#### Step 6: Respond to Comptroller Requests
You must respond within 30 days to keep your claim active.
Common Mistakes and How to Avoid Them
Missing the Statute of Limitations Deadline
The clock starts when tax was due—not when you discovered the error.
Submitting One Form for Multiple Vendors
Each vendor requires a separate Form 00-985.
Incomplete or Unauthorized Signatures
Only authorized individuals can sign.
Failing to Toll the Statute of Limitations
Incomplete submissions do not stop the clock.
Not Providing Sufficient Documentation
You must clearly prove:
- Tax was paid
- It was paid in error
Exempt Organizations Claiming Pre-Exemption Purchases
Refunds are not allowed for purchases made before exemption approval.
What Happens After You File
Review Process
The Comptroller reviews your submission and verifies completeness.
Requests for Additional Information
You must respond within 30 days.
Possible Outcomes
- Approved → Refund issued
- Incomplete → Additional info required
- Denied → Explanation provided
If Your Claim Is Denied
You have 60 days to:
- Request a hearing
- File a Notice to bypass hearing
Processing Time
- Simple claims: weeks
- Complex claims: months
Tracking Your Refund
You can check status via email with the Comptroller.
FAQs
What does “assignor” and “assignee” mean?
The assignor is the seller who collected and remitted the tax. The assignee is the purchaser requesting the refund. The form transfers the seller’s right to claim the refund to you.
Can I file a refund claim without Form 00-985?
Only if you held a sales tax permit or qualify under specific exceptions like severance taxpayers. Otherwise, the form is required.
What if the seller refuses to complete the form?
Sellers are not legally required to complete it. You may escalate internally, but without it, your refund options are limited.
How long does it take to receive a refund?
It depends on complexity. Simple claims take weeks; complex ones can take months. Complete documentation speeds things up.
Can nonprofits claim refunds for purchases before exemption approval?
No. Refunds are only allowed for purchases made after official exemption status is granted.
How should I organize claims from multiple vendors?
Submit:
- One Form 00-985 per vendor
- One Form 00-957 total
- Organized documentation by vendor
What happens if my claim is denied?
You have 60 days to request a hearing or proceed to court. Missing the deadline forfeits your rights.
